As economies struggle to recover in the pandemic and U.S.-China tensions flare, investors piling into precious metals may be overlooking another potential haven: wood.
Lumber futures have doubled since early April and are level pegging with silver as the top-performing major commodity this year. Surprisingly, wood is even outshining gold — the go-to haven investment.
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While lockdowns and stay-in-place restrictions were expected to curb demand for building materials, North Americans stuck inside decided to spend money and renovate their homes just as aggressive production cuts tightened supplies.
To be sure, lumber trades at much lower volume than gold and other metals and is prone to wild price swings. But producers such as Canfor Corp. expect strong demand and prices will continue into early fall.
“The home-centre demand has been so strong compared to what anybody would’ve expected,” Canfor Chief Executive Officer Don Kayne said Friday on the company’s quarterly earnings call.